Bitcoin dipped below $108,000 as escalating tensions between the US and China continue to rattle financial markets. Over the past 24 hours, the leading cryptocurrency dropped around 3%, hovering near $108,000 after briefly rebounding above $111,000 earlier in the week. Market analysts attribute this sharp decline to growing concerns about trade disputes and increased speculation in anticipation of high-level meetings between US and Chinese leaders.

The heightened uncertainty has driven traders to reduce their exposure, resulting not only in a decline for Bitcoin but also across the wider crypto market. Major altcoins like Ethereum, BNB, and Solana registered losses of between 4.5% and 6%. The volatility is further reflected by the Fear & Greed Index, which plummeted to 34, indicating a shift from cautious optimism to pronounced fear among investors.

Spot crypto ETFs recorded notable outflows, with nearly $40 million withdrawn from Bitcoin funds and over $145 million from Ethereum-based investment products in recent sessions. This outflow highlights the prevailing risk-off sentiment as investors await key economic data, particularly the release of the US consumer price index. With inflation figures on the horizon, the cryptocurrency market could continue to experience sharp swings depending on the potential policy response from the US Federal Reserve.

Industry leaders suggest that, even if negotiations between the US and China yield some progress, market volatility may not dissipate immediately. The macroeconomic backdrop remains complex, and digital asset prices are likely to react sharply to any significant updates on trade, inflation, or central bank moves in the weeks ahead.